UA economist says immigration law "costly"

BIRMINGHAM, Ala. -- Alabama's new immigration law, while well-intentioned, "will be costly to the state economy," a University of Alabama economist said today.

Samuel Addy, director of UA's Center for Business and Economic Research, said in a position paper that the state's new immigration law will lead to at least a $40 million contraction in the state's economy if it drives 10,000 illegal workers from the state.

That figure is based on the conservative assumption that each illegal worker makes $5,000 a year, Addy wrote.

In an interview, Addy said anecdotal evidence strongly suggests that only a small number of jobs vacated by illegal workers will be filled by legal residents. So the state will suffer a net loss in productivity, he said.

"It reduces demand. The economy will contract," he said.

Illegal residents are less of a drain on the state's resources than many critics suggest, Addy said. Many make so little money that they would not pay federal income tax if they were legal residents, and they don't receive many benefits while still paying payroll, sales and property taxes, directly or indirectly.

It's too soon to really understand the impact the law will have on the Alabama economy, Addy wrote, but a preliminary assessment suggests its consequences weren't taken into account when it was passed.